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This week I had the pleasure of speaking with graduate students from the Business, Economics, and Law programs at the well-renowned Insper College in São Paulo. Our discussion centered around life choices and my career. This was my third time addressing selected students at Insper, and each experience is uniquely rewarding. This time, I shared a perspective that I’ve been pondering daily. When asked, “How do I manage an intense job in investment banking, maintain a creative side, stay active in sports, hang out with friends, and still have a life?” my answer was candid—I don’t.

For a while, I’ve heard successful women claim that with proper agenda organization, “there’s time for everything.” I beg to differ. We all have the same 24 hours in a day and our lives can be segmented into slices: work, sports, family, friends, relationships, hobbies, etc. It’s virtually impossible to excel in all these areas simultaneously with full dedication. To me, it’s simple math. Excelling in your career often means another area of your life gets less attention. These are the choices and priorities we set.

I believe it’s crucial to convey this reality to young professionals just starting out. Social media often portrays successful individuals who seem to manage it all effortlessly. This portrayal can lead us to question, “Why can’t I manage this?” The truth is, it’s not about failing at life management; it’s about the reality of life’s trade-offs, which are usually NOT reflected in social media. So my advice, both then and now, is to always be skeptical of those who claim to wake up at 5 AM, work 14 hours, then go out to socialize, and still find time to read, study, and write before doing it all over again the next day. It’s not a question of organization; it’s about making deliberate choices and recognizing the trade-offs of those choices. Success in any area inevitably requires sacrifices in others.

I’m pleased that the students appreciated my honesty and could relate to my insights. Thank you again for the invitation.

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Opinions expressed here are solely my own and does not represent those of people, institutions, organizations that I may or may not be associated with in any capacity, unless explicitly stated.

On to the usual market update, I read a very interesting piece by Pitchbook on the returns of Emerging Managers. Established managers benefit from extensive experience and a proven track record, which they leverage to attract Limited Partners (LPs). In contrast, emerging managers, lacking this history, must rely more on forward-looking narratives and innovative strategies. In sectors like venture capital (VC), emerging managers have consistently outperformed since the late 1990s, although they exhibit greater volatility in returns compared to their established counterparts. While the paper does cover all sectors: PE, Buyouts, Real Estate, etc – I will focus on the analysis of Venture Capital emerging managers, which I found very interesting.

In VC, between 2010 and 2019, simulations indicated that portfolios exclusively containing funds managed by emerging managers yielded a higher median return than those managed by established managers. The top-performing emerging managers significantly outperformed their established counterparts, demonstrating a broader range of returns but also less predictability.

In venture capital, specialists generally outperform generalists across both established and emerging manager categories. The ability to specialize in a particular sector grants an edge, as founders often prefer working with sector-focused funds. This advantage is further confirmed by higher IRRs in both the top and bottom quartiles among specialists.

For established managers to consistently outperform, they must periodically evaluate their size and strategy, often sticking to a familiar market segment to maintain consistent returns. Managers with funds exceeding $250 million have shown the most stable returns, albeit with limited potential for higher returns. Comparatively, smaller established funds (under $250 million) exhibit wider performance dispersion, indicating that intentional size restraint can lead to significant returns.

Established managers, like Andreessen Horowitz, have also expanded into new strategies, increasing fund sizes while targeting different venture stages. Fund performance data from VC managers between 2000 and 2018 shows that emerging managers generally deliver the highest returns but with greater volatility. Despite the inherent risk, top-decile emerging VC managers have achieved significantly higher returns compared to their established peers. However, established funds are considered a safer bet for LPs overall, particularly in minimizing downside risk.

Monday 

General news:

• Despite a major LP pullback from venture, an elite cohort of VC firms is still successfully raising huge sums of LP capital. General Catalyst, which has led rounds for companies like Snap, Warby Parker and Deliveroo, is wrapping up a $6 billion VC fund, the Financial Times reported. Earlier this month, Andreessen Horowitz announced it had raised $7.2 billion across five fund strategies. That combined $13.2 billion represents about 44% of the total LP capital committed to US VC funds since the start of the year, according to PitchBook data.
• Rappi announced its new global CFO to support their LatAm expansion. Tiago Azevedo has previously worked at Mercado Livre, Hershey’s, and Unilever.
• Urbano Bank, Brazilian fintech, disclosed its Q1 results. The startup reported a net revenue of BRL$ 3.8 million (+110,38%) compared to Q1 of 2023, and 1,525 accounts which represents a 600% growth over the same period. TPV was BRL$ 548 mm boasting a 4.959,43% growth.
• Google for Startups launched an acceleration program for AI startups. The first edition of the AI Academy will take place in Brazil; Advolve, Beep Saúde, and Merama are among the selected startups.

Deals:

• Yuna, Brazilian startup that uses artificial intelligence to create personalized stories for children, raised R$ 8 million in a pre-seed round led by Canary, with participation from Positive Ventures and other angel investors.

Tuesday

General news:

• Brazilian AI Startups Raise $110M in Q1. According to Sling Hub, Brazil accounts for 55% of investments, with 38 rounds and $35 million invested in AI-first startups.
• Brazilian AI Startups Raise $110M in Q1. According to Sling Hub, Brazil accounts for 55% of investments, with 38 rounds and $35 million invested in AI-first startups.
• C6, Brazilian digital bank, reported a profit of R$ 460.9 million in the first quarter, the first in its five-year history.
• The Financial Times has reached an agreement with OpenAI, the owner of ChatGPT—backed by Microsoft—allowing it to train its artificial intelligence (AI) models using the newspaper’s content. According to the terms of the agreement, the FT will license its content to OpenAI to aid in developing generative AI for creating texts and images. The agreement also enables ChatGPT to respond to questions with brief summaries of FT articles, along with links to FT.com. This means that the software’s 100 million users worldwide will be able to access FT news reports.

Deals:

• Chilean Startup Movener Secures $2 million from SQM Lithium Ventures. The company transforms diesel trucks into hybrid electric vehicles.
• Smartbreeder, a startup from Brazil that develops a cloud-based digital agricultural intelligence platform intended to optimize the performance and management of crops by developing decision support systems, has just received $3 million in funding. The investment comes from EcoEnterprises Fund, a manager that has been investing in businesses related to biodiversity preservation and sustainability for over 25 years.

Wednesday

General news:

• Apple rallies on an upbeat forecast, positive results and record buyback.
• Binance founder CZ was sentenced to 4 months in prison, in line with expectations.
• Amazon’s revenue saw a 13% increase, to USD 143bn, as AWS leads profits.

Thursday

General News:

• The Federal Reserve acknowledged stalling progress in bringing down inflation to its 2% goal and opted to hold its benchmark interest rate at current levels. Furthermore, Fed officials are “prepared to maintain the current target range for the federal funds rate for as long as appropriate,” Chairman Jerome Powell told reporters at the post-meeting press conference.
• Latitud Ventures achieves independence and aims to become the Latin American counterpart of Y Combinator. The venture capital arm of Latitud launches its second fund and announces changes, including a mentoring program for its portfolio companies.
• RX Ventures, a corporate venture capital (CVC) fund linked to Lojas Renner, plans to invest R$155 million in at least 10 companies over the course of four years. The company has now established an official channel to connect with the ecosystem, facilitating relationships between innovative solutions and its various business areas.
• Neon expands service offerings and aims for profitability in 2024

With 30 million clients, Neon has tripled the average revenue per active user in two years and reduced costs.

• Bettha launches platform for SMEs and prepares a R$ 15M funding round for scaling. HRTech connects companies to over 1.2 million professionals registered on its platform.
• Under new leadership, Gerdau Next aims to invest with a “grounded” approach. The innovation arm of the steel giant is now led by Elder Rapachi and is preparing new rounds for the second semester.
• Minds Digital, a Brazilian startup specialized in voice biometrics, has just launched FraudShield – a multi-channel fraud prevention platform. According to the startup, the new product can analyze voice data and cross-reference it with behavioral analysis, generating insights that support the identification and prevention of scams and identity fraud across different customer service channels. With this innovation, the company aims to prevent R$1.5 billion in scams over the next three years and increase its business by 35%.
• Coopercitrus expands “business factory” and launches fintech to support producers in credit. With over R$ 5 billion in financing flowing through its operations, the cooperative establishes a company to assist members in finding better financial market conditions. It’s the third new venture of the year.
• Tivit experienced a 10.4% increase in revenues in 2023 and anticipates a continuation of favorable conditions in 2024. The company emphasized that this growth was fueled by the acquisition of new contracts and the rising demand for its cloud computing, digitalization, and cybersecurity services.
• Prodesp, the company responsible for data processing and IT development for the State of São Paulo, has appointed executive Johnatan Highlander (former Cubo Itaú) as its new Innovation Coordinator.
• ACE Cortex appoints Milena Fonseca as new CEO to drive innovation with AI. The executive takes on the role to spearhead a strategic shift with a focus on innovation and personalization.

Deals:

• G2D has just announced its largest divestment in history, with a return of R$ 117 million. The holding company for investments in startups, controlled by GP Investimentos, has sold its stake in Edgard&Cooper, an American brand specializing in healthy pet food.
• Kortex Ventures leads investment in Biologix, a startup proposing a cheaper and more scalable alternative for sleep quality tests. The venture is gaining support from three other heavyweights in the sector through a R$ 6 million investment led by Kortex Ventures, a corporate venture capital fund with Fleury, Sabin, and Bradesco Seguros groups as investors.

Friday

General News:

• Brazilian mediatech, Play9, announced that it will launch a new initiative called PlayNest which uses technology to help the small and nano influencers. The company saw a revenue of BRL 146mm in 2023, and expects to grow another 20% this year. Creators already on their platform include Fatima Bernardes, Galvao Bueno and Giovanna Ewbank.
• Silicon Valley Bank agrees to sell its VC arm, Reuters reports. The acquisition will be carried out by an entity affiliated with Pinegrove Capital Partners, backed by Brookfield and Sequoia Heritage, as well as creditors.
• Entrepreneurs establish a network of edtechs with a focus on integrated education. With 11 startups, the SQUARE ecosystem impacts over 10,000 schools, 250,000 teachers, and 4.5 million students in both public and private sectors.
• Foodtech NotCo announces market veteran as president. Andre Weinmann brings experience from multinational companies such as Mondelez and Nestlé, and will face the challenge of steering the startup toward breakeven.
• European payment fintech SumUp has raised 1.5 billion euros in a debt funding round led by the American firm Goldman Sachs. According to the company, the funds will be used to refinance existing debts and seize global growth opportunities. Currently, SumUp serves over 4 million customers in more than 30 markets, including Brazil, where it has been operating since 2012.

What did I learn from readers?

As promised, here is my key takeaways on Microsoft’s podcast by Acquired. IMPORTANT: this summary does not, by all means, is NOT the same as listening to the 4 hour podcast. Trust me!!!!! As people say, “the devil is in the details.”

• Founding and Early Years (1975): Microsoft was co-founded by Bill Gates and Paul Allen in Albuquerque, New Mexico. The company started by developing software for the Altair 8800, an early personal computer.
• MS-DOS and IBM Partnership (1980): Microsoft’s major breakthrough came with the development of MS-DOS, the operating system for IBM’s first personal computer. This partnership significantly boosted Microsoft’s profile and revenues.
• Introduction of Windows (1985): Microsoft launched Windows, a graphical extension for MS-DOS, in 1985. This marked a pivotal shift towards user-friendly interfaces that would define future operating systems.
• Competitive Strategies in the 1980s and 1990s: Bill Gates was known for his competitive tactics to dominate the PC software market. Microsoft aggressively expanded its product line into various software categories, often outpacing or absorbing competitors.
• Internet Focus and Browser Wars (1990s): Under Gates’ leadership, Microsoft shifted focus to the Internet in the mid-1990s, launching Internet Explorer. This led to the browser wars, particularly against Netscape, which highlighted Microsoft’s intense competitive strategies.
• Expansion and Diversification: Over the years, Microsoft expanded beyond software into hardware with products like Xbox and Surface, and into services with Azure cloud computing, maintaining its competitive edge by adapting to market changes.
• Leadership and Legacy: Gates’ ambition and foresight to place a PC in every home and his competitive strategies not only led to Microsoft becoming a dominant force in the tech industry but also shaped the future of personal computing.

Bill Gates’ competitive nature and vision were central to Microsoft’s strategy and success, driving the company to innovate and often dominate its industry sectors.

• Strategic Acquisitions: Microsoft’s recent acquisitions have been strategically aimed at enhancing its cloud computing capabilities and expanding its consumer base, particularly in gaming and enterprise software sectors. This includes significant acquisitions such as GitHub and ZeniMax Media, which have bolstered its offerings in software development and gaming, respectively.
• Innovation in AI and Machine Learning: Microsoft has heavily invested in artificial intelligence, particularly in enhancing Azure, its cloud computing service. Azure has become a leading platform for AI services, offering solutions for businesses and making strides in ethical AI, which is crucial as AI becomes increasingly integral to tech solutions.
• Growth in Cloud Services: Azure’s growth has been a cornerstone of Microsoft’s strategy, with the service seeing significant expansion in capabilities and market share. This growth reflects Microsoft’s competition with other tech giants like Amazon and Google in the cloud services arena, where it has made strategic moves to secure and expand its position.
• Impact of Leadership Changes: Under Satya Nadella’s leadership, Microsoft has undergone a cultural and business transformation. Nadella’s focus on innovation, open-source technology, and accessibility has reshaped Microsoft’s approach, making it more adaptive and inclusive. This leadership has steered Microsoft through new technological frontiers and diversified its products and services beyond traditional software.

These strategic directions highlight Microsoft’s continuous evolution from a software-centric company to a multifaceted tech giant deeply integrated into all aspects of digital technology and innovation.

What am I reading?

What am I listening to? What am I watching?

• Random Hip-Hop, nothing special this week.

Quote of the week:

“Work-life balance isn’t about balancing your time; it’s about balancing your energy. It’s not how many hours you spend at home or at work; it’s how present you are wherever you are.” (Unknown)

Originally published on my Substack.